Transportation and Logistics Services Presentation to NDTA November 1, 2016
1
Learning Objectives • Understand the principles of Category Management and the Federal Government's vision for implementing Category Management • Understand the scope of the Transportation and Logistics Services Category • Discuss and share strategic plans for Transportation and Logistics Services
2
Agenda • Federal Government’s Category Management Vision • Transportation and Logistics Services Category Overview • Version 1.0 Strategic Plan Initiatives • Version 2.0 Strategic Plan Initiatives • Acquisition Gateway • Discussion
3
Introduction of Ms. Lesley Field
[insert photo]
Ms. Lesley Field Acting U.S. Chief Acquisition Officer Office of Management and Budget
4
Category Management Overview Category management is a purchasing approach that the federal government is applying to buy smarter and more like a single enterprise. It involves: • Identifying core categories of products and services, and managing them accordingly • Cultivating and maximizing expertise to inform and enhance a customer’s buying experience • Developing purchasing strategies so that customers find the best value for the items they need Category management enables us to eliminate redundancies, increase efficiency, and deliver more value and savings from the government’s acquisition programs.
5
Category Management Overview - Why Implement Category Management? -
-
-
- Right now, the government purchasing landscape is ad hoc. - Agencies make independent purchases that frequently lack strategy or coordination. - The landscape is characterized by costly redundancies in contract vehicles, buys, and efforts.
Current State of Purchasing: • Lack of coordination across agencies • Duplicated efforts • Many agencies; no leveraged buying power
Future State of Purchasing: • Better procurement coordination across government • Industry involvement in developing category strategies • Core competencies leveraged to match customer needs • One common management framework
6
Category Management Overview - Category Management Goals
Increase Cost Savings • Increase spend under management • Achieve volume savings • Achieve administrative savings
Foster Knowledge Sharing • Share best practices • Grow and share expertise
Promote Efficiency • Reduce contract duplication • Enhance transparency • Create better contract vehicles • Manage data collection and analysis • Enable better decisions
Improve Relationships • Maximize purchasing agency relationships • Leverage supplier relationships • Optimize buying channels • Manage the solution landscape
7
Category Management - Vision Category Management is designed to deliver significant benefits to agencies Enablers Better data and methods for making business decisions Coordinated approaches to managing strategic supplier relationships Development of a more specialized acquisition workforce Improved automation and process simplification Increased sharing of information and best practices
Outcomes Increased savings from more aligned requirements, supply bases, and reduced contract duplication Better utilization of acquisition resources - focused on strategic, mission-oriented tasks Improved alignment between acquisition and strategy Expanded benefits in mission performance - defined on a category-by-category basis
8
Category Management Governance Structure
9
Government-Wide Category Management KPIs CAP Goal Metric
Initial Baseline $548M
Increased Savings Note: Baseline includes strategic sourcing savings from FY2010-2015; The methodology is 7.5% savings of spend under management Percent of common spend ($272B) that is under government- 0% of $272B wide management Note: As of January 2016, 54% of spend sampled ($171B of $272B) is under Tier 1 or Tier 2 management. Third data call planned Q1FY17. 717K Percent reduction in the number of new/renewed contracts contracts Note: Baseline represents universe of stand alone contracts for all common spend ($272B) Meet or exceed government-wide small businesses goals 23% Increase the number of unique users of the Acquisition Gateway
7,000
Status FY16 Q3 $2.1B
FY 17 Goal $5.2B
FY 18 Goal $7.2B
FY 19 Goal $9.3B
0%
$40.8B (15%)
$68B (25%)
$95.2B (35%)
TBD
10%
20%
35%
23%
23%
23%
23%
8,400
15,000
19,000
24,000
Baselines established in FY15 (except as noted).
10
What Does This Mean for Industry Partners? Improved Relationships
Constant collaboration between Government and industry will help develop a continuous process of improvement in Federal procurement.
Reduced Complexity
Implementing best practices across each category and sharing contract information between procurement units in a centralized location will reduce duplication and complexity.
Improved Performance
Performance metrics, collaboration and simplification lead to improved overall performance for both Government and industry.
Increased Innovation
Implementing best practices and enabling them in a central location will allow the acquisition community to share expertise, utilize tools, and increase innovation.
Reduced Costs
That all adds up to a reduction in costs for Government, industry, and taxpayers.
5
10 Government-wide Categories with Total FY15 Spend of $272B Tiffany Hixson (GSA)
Mary Davie (GSA) 1. IT – $50.7B 1.1 1.2 1.3 1.4 1.5 1.6
IT Software IT Hardware IT Consulting IT Security IT Outsourcing Telecommunications
2.
Professional Services $63.4B
2.1 2.2 2.3
Business Administration Services Legal Services Management Advisory Svcs (excl. R&D) Marketing and Distribution Public Relations and Professional Communications Services Real Estate Services Trade Policy and Services Technical & Engineering Svcs (non-IT) Financial Services Social Services
2.4 2.5 2.6 2.7 2.8 2.9 2.10
Greg Hammond (GSA) 6.
Office Management - $1.7B
6.1 Office Management Products 6.2 Office Management Services 6.3 Furniture
Jaclyn Smyth (DHS) 3. Security and Protection - $5.3B 3.1 Security Animals & Related Services 3.2 Security Systems 3.3 Security Services
Lisa Roberts (DoD) 7.
Transportation and Logistics Services - $25.6B
7.1 7.2 7.3 7.4 7.5 7.6
Package Delivery & Packaging Logistics Support Services Transportation of Things Motor Vehicles (non-combat) Transportation Equipment Fuels
Mary Ruwwe (GSA)
George Prochaska (GSA)
4. Facilities & Construction -$72.5B
5.
4.1 Construction Related Materials 4.2 Construction Related Services 4.3 Facility Related Materials 4.4 Facility Related Services 4.5 Facilities Purchase & Lease
Industrial Products & Services $11B
5.1 5.2
Machinery & Components Fire/Rescue/Safety/Environmental Protection Equipment Hardware & Tools Test & Measurement Supplies Industrial Products Install/Maintenance/Repair/Rebuild Basic Materials Oils, Lubricants, and Waxes
5.3 5.4 5.5 5.6 5.7
Timothy Burke (GSA) 8. Travel & Lodging $2.2B 8.1 Passenger Travel 8.2 Lodging 8.3 Travel Agent & Misc. Services
Rich Vinnacombe (OPM) 9. Human Capital – $4.7B 9.1 Specialized Educational Services 9.2 Vocational Training 9.3 Human Resources Services
Dr. Karen Guice (DoD) + Dr. David Schulkin (VA) 10 Medical – $35.2B
10.1 Drugs and Pharmaceutical Products 10.2 Medical Equipment & Accessories & Supplies 10.3 Healthcare Services
12
Transportation & Logistics Services Overview Transportation & Logistics FY15 Spend ($B) Total Category FY15 Spend: $25.64B 0.6
0.46 Fuels
4.15 9.23
Logistics Support Services Transportation of Things Motor Vehicles
4.68 Package Delivery & Packaging Transportation Equipment 6.52
Observations • The 4 highest spend sub-categories represent 96% of the total category spend in FY15: • These sub-categories are not currently driving KPIs, except for Fuels included in the FY16 SUM Goal • Strategic Plan and initiatives should focus on these top 4 sub-categories
*Source: Federal Procurement Data System, FY15 baseline
13
Transportation & Logistics Category Trends • Fuels (liquid propellants and fuel oils) dominate this category with a FY15 spend in excess of $9B • Across the Category, the top spenders are DoD and GSA • Government-wide spend on Transportation and Logistics Services decreased by nearly $12.9B between FY10 and FY14, and number of transactions decreased by over 3,000 • Federal spending on Transportation and Logistics Services is forecasted to remain static (approximately $26B) for the next 3-5 year period • Small Business utilization within this category for FY15 was 17%, which has increased since FY10 (10%)
14
Strategic Plan Version 1.0 Initiatives Small Package Delivery Services Solution
DLA Fuels Solution
• Combine current DoD and GSA contracts into one Government-wide small package delivery services contract to meet the entire Government’s small package shipping requirements
• Explore existing DLA Fuels solution as an opportunity to apply Category Management principles and pursue Best in Class designation
15
Small Package Delivery Services
16
DLA Fuels Program
17
Strategic Plan Version 2.0 Initiatives (DRAFT) V2.0 Initiative
Designate DLA Fuels Program as Best-inClass Solution
Increase GSA Motor Vehicle Fleet Utilization
Bring GSA Vehicle Fleet Program SUM
Key Actions
KPIs Impacted
• • • • • •
Initiate BIC assessment Develop savings methodology Post relevant information to Acquisition Gateway Review Tier 3 SUM Achieve BIC designation Send formal communication to all impacted agencies and encourage BIC usage
• • • •
Savings SUM Small Business Gateway Usage
•
• • • • •
Savings SUM Small Business Contract Reduction Gateway Usage
•
Analyze Federal fleet data to identify agency opportunities, then engage agencies Develop a Total Cost of Ownership model for vehicle expenses and share with agencies Conduct outreach opportunities to agencies for potential opportunities for leasing and maintenance Create an on-line comparison tool for buy versus lease decisions
• •
Initiate formal Category Management BIC assessment Validate savings methodology
• •
Savings SUM
• •
18
Strategic Plan Version 2.0 Initiatives (DRAFT) V2.0 Initiative
Key Actions • •
Implement Next Generation Delivery Service (NGDS) Strategy
• • • • •
• Assess Government-Wide Freight Spend and Identify Opportunities to Improve Spend and Demand Management
• • •
KPIs Impacted
Establish a joint Program Management Office with a dedicated Services Acquisition Manager Design and implement processes to support NGDS governance, schedule, financial, and performance tracking Complete final evaluation of proposals Complete formal BIC assessment and approval Review criteria for reaching Tier 3 SUM Implement OMB mandatory use policy Create targeted campaigns to move any remaining small package delivery spend to NGDS
• • • • •
Savings SUM Small Business Contract Reduction Gateway Usage
DoD and GSA coordinate freight programs to access and consolidate tender spend data Conduct analysis to determine savings and contract reduction opportunities Explore use of procurement vehicles such as spot rates, tenders, contracts, and 3PL Establish approach to centralizing freight demand management
• • • • •
Savings SUM Small Business Contract Reduction Gateway Usage
19
Acquisition Gateway Will Enable Category Management
20
Acquisition Gateway Overview
21
Next Steps • Present V2.0 Strategic Plan to the CMLC for approval • Develop plan for implementation of initiatives • Develop more mature data analytics • Analyze and endorse Best-In-Class contracts • Continue ongoing engagement with Federal Agencies, other Category Managers, and industry suppliers
22
Learning Objectives • Understand the principles of Category Management and the Federal Government's vision for implementing Category Management • Understand the scope of the Transportation and Logistics Services Category • Discuss and share strategic plans for Transportation and Logistics Services
23
Discussion
